Podcast Episode - Ask Suze & KT Anything: Worried About Taxes and FICO Scores


Investing, IRA, Personal Growth, Podcast, Roth IRA, Taxes


November 02, 2022

Listen to Podcast Episode:

On this episode of Ask Suze & KT Anything, Suze answers questions about dollar cost averaging, schemes to pay less tax, reducing volatility in investments, staying budget friendly when starting a business and more.


Podcast Transcript:

00:00:33

Suze: November 2nd, 2022. Welcome everybody to the Women & Money podcast. What version of the podcast is this, KT?

00:00:42

KT: This is the KT - ask Suze anything podcast.

00:00:46

Suze: We've got that right finally.

00:00:49

KT: Wait, that was like take three everybody.

00:00:52

KT: Hi, Suze. It's November second. It's November.

00:00:56

Suze: How was your Halloween?

00:01:00

KT: Great!  Okay, so I woke up super early like 5:30, and I ran out with Colo on the boat, and I said we're going to trick or treat in the dark. And we caught two wahoo. Why Suze wasn't with us? That's another story.

00:01:15

Suze: Somebody has to work around

00:01:17

Suze: this place. Somebody...

00:01:20

KT: She had some interviews so she couldn't join us. But she followed us on her app, and it was very exciting.

00:01:26

Suze: They caught two wahoo. KT, as you know on the Women & Money app a little bit ago, I posted a picture of you holding that 35 pound wahoo.

00:01:41

Suze: And

00:01:41

Suze: somebody wrote in and they said, why didn't you help her hold it?

00:01:45

Suze: It looks awfully heavy.

00:01:47

KT: She will not touch them. First of all, they're real slippery. They are heavy. They're very dangerous. If you just nick your anything with the teeth. It's a big game.

00:01:58

Suze: I won't touch they're very dangerous. Everybody. Do you know that? I just won't touch it. I don't know why I don't.

00:02:03

KT: She doesn't even like to eat them.

00:02:05

KT: Okay.

00:02:06

KT: My first question is...

00:02:07

Suze: What are we going right there. Are you already up into business right now?

00:02:10

KT: No, this is this is a great statement and question. It's not even a question.

00:02:17

Suze: Wait, I wasn't finished with you.

00:02:19

KT: Okay. Halloween.

00:02:20

Suze: No, wait, wait not Halloween.

00:02:22

KT: Okay, November. Thanksgiving.

00:02:24

Suze: No. Holding the

00:02:26

Suze: 35-pound Wahoo. Was that heavy?

00:02:29

KT: Yeah,

00:02:30

Suze: Should I have helped you?

00:02:32

KT: It would be nice

00:02:33

KT: if I had a

00:02:34

KT: little help.

00:02:35

Suze: But I told everybody because of my arms, I can't help.

00:02:38

KT: Yeah, we don't want her to drop it. That fish was really hard to catch.

00:02:42

Suze: Okay,

00:02:43

KT: so the first email I have made me smile for two reasons. First let me read it.

00:02:50

KT: Querida Suze.

00:02:53

Suze: What does that mean?

00:02:54

KT: Dear in Spanish. Querida Suze, I've been binge watching your show. When I finished the 2015 season, I decided to go back to 2008 and start from the back to the front. So the show that Anna Maria, this is the second reason I love this email because that was my mom's name,

00:03:18

KT: Anna Maria sent this in because she's watching The Suze Orman Show on Amazon Freevee. And I'm so excited. Listen to what she said. Everyone she said, what a gem. Like so many people, I'm wanting to add real estate to my portfolio.

00:03:35

KT: Watching these episodes which seems to be at the beginning of the real estate crash, that was back in 2007-2008, has made me even more careful with my money. The information shared back then is so relevant today. Then she said, I wish people who are asking you questions Suze about real estate would go back, go to Amazon

00:04:01

KT: Freevee, and watch these episodes so they would avoid so many mistakes. So Anna Maria, that's a great way to start today's podcast.

00:04:12

Suze: Thank you. Thank you for watching.

00:04:13

KT: They're great shows. If you don't know The Suze Orman show, go to Freevee and watch them. Why Suze?

00:04:23

Suze: Because they are free.

00:04:24

KT: Okay. There you go. Okay. My next question.

00:04:28

KT: This is one where we need your response. Suze. A while ago I sold half of my XLE at $82. Which was about 46% return.

00:04:42

Suze: KT what’s XLE? Come on,

00:04:43

Suze: come on.

00:04:44

Suze: Do you remember what that.. (KT: It’s an oil stock, right?) it’s an energy ETF, that back in March of 2020, when it was around 22 to $30 a share kept trading all the way in there, right? I told people to buy it.

00:05:04

KT: This gets even better, listen Suze. And this is from

00:05:06

KT: from Angelo. So Angelo says Suze, today I sold the rest of it for $91.10. Wow. Thank you. Thank you. Thank you. Is what he wrote. Since this money is in my Roth and it's about $11,000, I was thinking I'm gonna dollar cost average over 6 to 9 months into VTI.

00:05:30

KT: And maybe some Noble, NOBL. I'm 54 years old. I'm single. I work for the Federal government and expect to have another 10 years before I start collecting my pension. Suze in your opinion is this a good plan?

00:05:47

Suze: Boy... I have to tell you. I'm... for

00:05:49

Suze: those of you who don't know, Noble, NOBL, that is the symbol for the pro share Standard and Poor's 500 Dividend Aristocrat ETF, which is made up of stocks that have increased their dividends for the past 25 years.

00:06:09

Suze: And VTI is the symbol for the Vanguard Total Stock Market Index ETF that's made up of thousands of stocks. Here's the thing Angelo, is that that's a good plan. You can do that if you want. However, you just need to know that in my opinion,

00:06:32

Suze: we have to retest these markets. They have to go back down and until they fix inflation, which they have not fixed yet, it's still not fixed. I won't go thinking that these markets are going to go up up up and up. So VTI is a great ETF to dollar cost average into. But I have to say, I'm not loving Noble as much as I once did.

00:06:59

Suze: So I'm not sure I would be doing that ETF. I like the Schwab US Dividend Equity ETF, symbol SCHD better. I like the Vanguard High Dividend Yield ETF. Both giving more of a dividend yield than Noble. So let's just see what happens here. But boy, you know,

00:07:25

Suze: I don't know.

00:07:26

KT: Do you give them your blessing or what?

00:07:28

Suze: I'm not quite sure. If I were going to do it, I probably wouldn't do it every single month. Like I said before, I would do it every two or three months, and just be watching really carefully what's happening in the stock market. But I will talk

00:07:44

Suze: more about this on Saturday night's podcast.

00:07:48

KT: Alright. There you go Angelo. Every two or three months.

00:07:51

Suze: If I did it, I would probably start to do it the first week or so of December where I bet we're not going to be so happy that month.

00:07:58

KT: Ouch. Okay, next one is from Gary. Hi Suze - Q and KT. I so value your advice and have implemented a lot of it. But I'm confused on a key question.

00:08:13

KT: So this is what Gary wrote. Suze, I heard you say that you're keeping your money safe rather than investing it for growth.

00:08:21

Suze: So is a lot of our money, KT.

00:08:23

KT: But he's saying he's talking to you, I am...

00:08:27

Suze: I'm talking to you. My money is our money. Don't you ever forget that.

00:08:32

KT: I won't.

00:08:33

Suze: You sometimes do.

00:08:34

KT: Sometimes I do, but I don't. So now Gary said...

00:08:37

Suze: Did you all hear how she shied away from that everybody?

00:08:42

Suze: Go on.

00:08:45

KT: So Gary said: Suze, I'm retiring in about three years. My current 403 b and 457 accounts are in a variety of funds, and my ranking is listed as more aggressive.

00:09:01

KT: So it has been fine until this year when I have lost close to 25%. So Gary says, I'm holding firm and hope to ride that volatility back up. Here's my question, Suze. I've realized from this year, I don't want that volatility in retirement,

00:09:20

KT: and would like to move some of my money to more stable investments once I regain a little ground. But I don't really know what that means. Is that Treasuries, is the target year index funds? What do you think, Suze?

00:09:37

Suze: Yeah. So let me just see that KT, what's the date? So.

00:09:41

Suze: Oh he just wrote this.

00:09:43

KT: It’s brand new.

00:09:44

Suze: Here's the thing, Gary, you should have recouped some of that loss given what's happened over the last month in the stock market, the stock market went up, the Dow jones industrial average went up like 14.5%. That's more than it's gone up since like the 1970s in one month. So hopefully you have recouped some of it as well.

00:10:11

Suze: Now with that said,

00:10:13

Suze: the reason that you lost so much is because you are signed up to invest aggressively. And when people invest aggressively, what that means is they buy growth stocks, they buy technology stocks, they buy stocks that go up, up, up really fast, and they go down, down, down really fast as well.

00:10:36

Suze: So you're really looking for value stocks, stocks that pay a dividend, stocks that you know have a good basis to them. And so would I do a target date fund? No. I wouldn’t at this period time. I don't like them. If you were to look at any target date funds where the retirement date is right now,

00:11:02

Suze: next year. You will find that they also have gone down 20% in value. And that's because they were invested in bonds, when they shouldn't have been invested in bonds. So if you really want to be safe, you would essentially do what KT and I did, which is

00:11:23

Suze: interest rates on treasury bills and notes are really fabulous right now. Now the question is, your money is in a 403n and a 457 plan, and chances are they don't sell individual treasuries and things like that.

00:11:43

Suze: So you need to look at what you have available to you within your retirement plans that are really stable. That are giving you a good interest rate. That are invested securely. That are invested in dividend paying value stocks. Now that might be of value 500 index fund.

00:12:04

Suze: But take a look and that's probably what I would be doing if I were you. Again, I would be dollar cost averaging into it, because I think you are going to see tremendous ups, tremendous down still, all over the place until they fix inflation.

00:12:22

KT: WOW!  (SUZE) Why are you "wowing" that?

00:12:24

KT: Because that was,

00:12:25

KT: it's a really strong, very clear direction. Go for it Gary. She just told you exactly what to do.

00:12:32

Suze: Have you ever heard? Well, you know, it's hard because we just have to wait and see really how everything goes.

00:12:39

KT: That was very, I was very happy with that. So next I have a good one here from Karen Mcafee. Ready Suze, listen to this one.

00:12:48

KT: Hi Suze. Stocks I sell from my brokerage at a loss to offset gains, has no bearing on what I buy for my Roth IRA. Right? So for example, if I sell Meta at a loss in my brokerage, can I buy Meta in my Roth IRA

00:13:09

KT: without having to wait 30 days? Yes or no?

00:13:14

KT: I

00:13:15

KT: don't. I have no clue how I would answer that one.

00:13:18

Suze: Yeah. So here's the thing for those of you who don't know, Meta is the new name for Facebook. One year ago, they changed their name from Facebook to Meta.

00:13:30

Suze: So they are down considerably from one year ago. Would I personally be buying Meta right now? I don't think so. You've got to be very careful with Meta. Just so you know now. Why are you scratching your face like that KT?

00:13:47

KT: Because I like Facebook. So I'm not sure

00:13:51

KT: if you're telling people not to buy it right now.

00:13:53

Suze: He is spending right now, about $10 billion a year. His net worth has gone down 100 (KT says: You're talking about Mark Zuckerberg?) yes - $100 billion because of this. Number one. That's a lot of money, KT. Number two, right? He is investing $10 billion a year,

00:14:15

Suze: into something that nobody knows for sure if anybody is gonna want, doesn’t make sense that he's doing it. People are confused. They are asking him actually to spend less per year. His advisers in Meta, don't spend 10 billion. Why don't you just spend five, maybe one billion.

00:14:38

KT: So he's creating the future, but people are a little skittish

00:14:42

KT: right now on what that future really looks like now.

00:14:45

Suze: He's convinced that this future is going to be.

00:14:49

KT: I kind of like his thinking I would bank on him.

00:14:53

Suze: I wouldn't bank on him at this point in time, KT. Right. Just so you know, there will be a time that you may want to bank on him personally. I wouldn't be doing it. I do not own

00:15:04

Suze: that stock. Nor do you Miss Travis. Right. But what Karen is talking about here is something that I mentioned on Saturday night's podcast known as the 30-day wash rule, which says, when you sell a stock and take it as a loss off your taxes,

00:15:27

Suze: that you cannot buy that stock back for 30 days. Otherwise, the loss is absolutely washed out. It is disqualified for.

00:15:39

Suze: It

00:15:39

Suze: is such a no, I cannot tell you, my dear Karen. You think you can fool the government? You cannot.

00:15:48

Suze: So you cannot offset a loss and buy a stock right away in a Roth IRA, in a traditional IRA, you cannot do that under any circumstance. So don't think that you can, because you cannot, it will disqualify that loss. Don't do it.

00:16:08

Suze: All right. Yes, KT.

00:16:10

KT: Next question is from Joel. Hi Suze and KT, my wife and I have been listening to your podcast for about the last six or seven months. We've learned more from you, Suze than any other source. Congratulations that's great. We started buying I bonds to supplement our retirement savings. Our question is regarding beneficiary designation on the I bonds.

00:16:36

KT: If we, the primary and secondary owners of an I bond, pass away at the same time, can our adult child inherit the I bond without any problems? We do have a living revocable trust that names her as the primary beneficiary of the estate.

00:16:55

Suze: Who is her?

00:16:56

KT: Their daughter.

00:16:58

KT: So the question is, or they're asking, should we rename the I bond owners, where one of us is the primary and the other is the secondary, or beneficiary and the daughter's name, or in or the trust.

00:17:14

Suze: So a little complicated there, my dear Joel, in terms of your question. So here's what's important for you to understand.

00:17:23

Suze: You are the owner of the I bond. Let's say you purchased it in your individual name. You then have the option to name either a primary beneficiary, or a secondary owner. You are the owner of the I bond in your account,

00:17:42

Suze: In your individual account, and your spouse is either the primary beneficiary, or you've named her as the secondary owner. The primary beneficiary only has the right, upon

00:17:57

Suze: your death, to get the I bond. The secondary owner can change the name of who the next beneficiary is, if you were to die, they actually own it in on a secondary level. They can look at it, they can make changes to it, and they can do anything they want. However,

00:18:18

Suze: my advice to you would be what I did. You know, before I got together with KT, I bought I bonds in my individual name. Until I really knew that KT and I were going to be together and everything, I continued to buy them in my individual name.

00:18:38

Suze: Then we created a trust, a living revocable trust like you have.

00:18:43

Suze: I then changed the name on the I bond, which you can do, from my individual name into the title of the trust. And now the trust owns it. So on my death, KT gets it. Let's say KT and I both die together, it's dictated by what is in the trust, which would take care of your daughter.

00:19:08

Suze: So that's actually what I would do if I were you. Transfer it into the title of your trust. Next question KT.

00:19:18

KT: This is from Joy. Hi Suze and KT, thank you for so much financial information. I'm 61, I own Exxon and Chevron stock, both of which are at all-time highs.

00:19:32

Suze: Yeah baby. Yeah baby. I told everybody not to sell it.

00:19:36

KT: I probably should sell some shares but I'm having a hard time letting go. Their dividends are very good. Is it smart to let go of some shares that would be long term capital gains, or is it smart to just keep them? And then Joy also said Suze, I have a bunch of losers I could sell to offset the gains, but again, I hate letting go

00:20:00

KT: of these two oil giants.

00:20:02

KT: Alright, so what

00:20:03

KT: should she do Suze?

00:20:04

Suze: You know, it's so funny whenever somebody tells me that they bought Chevron stock, and I'm sure all of you if you've been listening to me now for quite a few years, somebody wrote in, do you remember this? And I actually had a breakdown. They said their financial advisor said that they should sell their Chevron stock at 165. And do you remember this? I said,

00:20:27

Suze: they did, did they? Like what does your financial advisor know? Do you remember this little breakdown I

00:20:33

Suze: had? So.

00:20:34

Suze: I watched it go down to 145, and I was thinking, oh I can just hear that financial advisor say to this person told you, you should have sold at 165. I told you. And I'm sitting there thinking, while that's happening,

00:20:50

Suze: please don't get suckered in here. Oil's gonna turn around, oil is going to go back up, and you know right now Chevron is about, I'd say, about $179 a share right now. It's high for the year. KT it was 183 so, it actually was a little bit higher. And Exxon, Exxon is like, I think about $109 a share, something like that. Both

00:21:15

Suze: paying dividends of about 3 - 3.5%. So what would I do if I were you, Joy given that these are still really good dividend paying stocks, it is true that oil could go back down again. But I still think when the winter comes and everybody is freezing out in Europe and everything, oil will probably come back again. We'll just have to see. In the meantime,

00:21:40

Suze: they're paying you a good dividend and you're having a hard time letting them go. Here's what I would do if I were you. I would sell them,

00:21:51

Suze: and offset the gain with the stocks that you have losses on. Again, that's called tax loss harvesting. You're gonna harvest your gains against your losses. Now unlike a stock where you take a loss that you cannot buy back for 30 days, you could buy

00:22:12

Suze: back Exxon the exact same day you sold Exxon. You could buy back Chevron the exact same day you buy Chevron. There's no problem with buying a stock back that you're paying taxes on, even if you're offsetting those taxes with losses. If you were to buy them back right here, when you sell them, two things happen. If they continue to go up,

00:22:40

Suze: your new cost basis in the stock will be whatever they're trading at right now. Like 179, or 109, or whatever they're at at the time you do this. So if they go up even higher, and then you decide to sell them, and you've held them for at least a year,

00:23:02

Suze: then you're only gonna pay capital gains on the difference between what you bought them today at, and if they go higher. If they go lower,

00:23:12

Suze: okay, they go lower. And if you decide to sell them, now you have a loss. Rather than a smaller capital gain. But if you like those stocks, that's how you reset your cost basis, and take advantage of a gain against losses. That's what I would do.

00:23:34

KT: Next question, Suze is from Laura. Hi.

00:23:38

KT: I have to take, this is a funny question. I have to take $25,000 from my IRA before the end of the year because I am 72 years old. Sound familiar Suze?

00:23:51

Suze: That's coming up for me.

00:23:53

KT: What's the best thing to do with this money so I don't get heavily taxed? My house is paid

00:23:59

KT: for, and I'm not interested in buying any more real estate. This is from Laura. What should Laura do?

00:24:05

Suze: Does Laura have a lot of real estate? Maybe, Huh? Anyway, here's what I would do if I were you. First of all, you are going to pay ordinary income taxes on the $25,000. And there is nothing

00:24:20

Suze: you can do about that. You can't offset it, you can't do anything. You're going to owe ordinary income taxes on that. And that $25,000 may make it so that you also have to pay taxes on your Social Security, as well as your Medicare B premiums. Which is why I will just state again,

00:24:41

Suze: a Roth IRA, a Roth IRA, a Roth IRA is how everybody should have their money invested if they can. So the best thing you can do with this money, is to not worry about getting heavily taxed on it.

00:24:59

Suze: Because even if you took $25,000. Let's say you put it in an Alliant Credit Union account. And you are going to get two or 3% over time on it. That's not a lot of money

00:25:14

Suze: in terms of what it's gonna cost you in taxes. You also could take that money if you wanted to, and you still could buy a Series I bond, at the new interest rate that is out, which is 6.48%, and that interest, those taxes are just deferred. So you can defer them until maybe you don't have to take any more money out of your IRA if you want. So there are other things you can do, but

00:25:44

Suze: don't worry about getting taxed on the $25,000. It's not that much money, girlfriend.

00:25:53

Suze: You know, KT, I just have to say something here. So many people write in, and they're so worried about taxes. They want to avoid taxes, they don't want to do this.

 00:26:02

KT: That's part of our life.

00:26:04

Suze: It is part of your

00:26:04

Suze: life,

00:26:06

Suze: and and you need before you do something and you let somebody else talk you into seriously what you should be doing with your money simply to avoid taxes, what you really want to be doing with it is figuring out how much taxes would you actually owe?

00:26:24

Suze: So even if you were to get 3% on it, you're talking about $750 a year in interest.

00:26:32

Suze: Let's say you decide to buy a treasury right now, and you get 4%. They're not text on the state level. So it's not that much interest girlfriend. So don't again like I said worry your pretty little head about it.

00:26:47

KT: Suze, next questions from Susan. My question is, should I pay off my car loan,

00:26:54

KT: $11,000 at 2.2%, or, allow it to help my FICO score, since it's the only debt I have? Home has paid off, Alliant Credit Union accounts are open, and 10,000 in I bonds. When inflation comes down and the interest rates come down,

00:27:16

KT: I would like to apply for one to do some remodeling and hoping the higher my FICO, the better rate they'll offer. Currently, ready. Suze listen to this. Everyone currently my FICO is 780.

00:27:32

KT: Thanks for all you do Suze. I look forward to hearing from you both during the week.

00:27:37

Suze: Well she's

00:27:38

Suze: going to hear right now.

00:27:40

Suze: You

00:27:40

Suze: have a great score.

00:27:42

Suze: So here's the thing Susan it doesn't matter if you have a 780 or an 850 FICO score, which is the highest FICO score you can get.

00:27:51

Suze: That 780 puts you in the highest range of FICO scores, which means you will get the lowest interest rate out there again. For those of you who don't know when you have a high FICO score,

00:28:06

Suze: you pay lower interest rates. When you have a low FICO score, you pay higher interest rates. FICO scores run from 500 all the way up to 850. Really, you want a FICO score of 760 or above. So your question is, should I pay off my car loan, 11,002 600.2%? Yeah,

00:28:27

Suze: you should pay off your car loan. Because first of all, the 2.2% is not tax deductible. So that's what it's really costing you. It's not really helping you on your FICO score because you already have a great FICO score. KT and I both have incredible FICO scores,

00:28:49

Suze: we don't have any debt. We don't make any payments. We have nothing, and we haven't had anything like that for years. So don't keep debt just so you can have a better FICO score. Because really, you can't have much better of a FICO score than you already have.

00:29:06

KT: Yeah, that's what I thought. I have one more question Suze.

00:29:09

KT: I like this question it’s from

00:29:11

KT: Kayla.

00:29:12

KT: Suze, I am a very new business owner and would love some tips on how to stay budget friendly. Okay. Want me to tell you what I would do, Suze?

00:29:22

Suze: Finally! Go on.

00:29:24

Suze: I've been waiting all podcast for her, for her to say to me, do you want me to answer that Suze?

00:29:30

KT: I've been a new business owner, and I know that the number one rule that you should absolutely be doing as a new business owner is to be sure you pay yourself a salary.

00:29:43

KT: Number one rule that will not only keep you budget friendly, it'll keep you safe and sound and secure.

00:29:51

Suze: Here's the thing. Over all the years I've been doing this, especially women business owners. Different with men, but

00:30:01

Suze: women business owners. They open a business, they think they're doing great. They're paying their employees, everything's going good. But they haven't paid themselves in two or three years. It's as almost as if you don't matter. And then you're doing this, and you're doing this, and you don't have any savings, and you haven't put money away in your own retirement, and the years go by, something goes wrong.

00:30:25

Suze: The pandemic happens, 2008 happens. The business has to close, and you have absolutely no money. So your business as a new business owner, can only be deemed successful if it is generating

00:30:40

Suze: enough money so that you not only can pay your personal bills, you can take a salary, but you have money as well to put into a retirement account for yourself. 100% of what you make should not be going back into the business.

00:30:57

Suze: You have to set aside some amount that goes into your future. Otherwise, you will make one of the biggest mistakes out there. KT, it is your quizzie  

00:31:09

Suze: time.

00:31:11

Suze: Now I chose the quizzie that was kind of based on a question that I knew you were going to ask today.

00:31:20

Suze: Because I saw you printing it out. So here we go.

00:31:25

Suze: I actually don't know who this is from. It says FVD. Hi Suze, great podcast. You mentioned the 30-day wash sale rule, and that you cannot rebuy that same or similar stock for 30 days after selling it for a loss. Now

00:31:46

Suze: everybody, if you're new to the Women & Money podcast, this is KT's quizzie. Where KT has to answer, but it's your quizzie as well. Have you been listening to my podcast? Do you listen to what I say? Are you learning from it? So you need to be able to answer this question as well. Okay?

00:32:08

Suze: Is it true,

00:32:10

Suze: you also break the wash sale rule if you traded that stock 30 days before taking that loss, even if it was traded in your IRA, or even if it was traded in your spouse's IRA? So.

00:32:30

Suze: We'll take the example of Meta, the stock that other person was going to want to sell and then buy back.

00:32:38

Suze: Let's say you bought 100 shares of Meta today. Alright. 30 days from now, you have another 100 shares of Meta that have a tremendous loss in them.

00:32:53

Suze: So you want to sell that stock at a loss,

00:32:58

Suze: and take it off your taxes. Is that lost disqualified because 30 days before you sold it, you bought that stock?

00:33:11

Suze: You should see your face.

00:33:13

KT: I don't know. I mean, I can guess.

00:33:16

KT: I'm going to have to guess on this, because

00:33:19

KT: I have one that I bought today, 100 shares.

00:33:23

Suze: You bought it, you're buying it today because you think it's gonna go right up from here.

00:33:26

Suze: And then

00:33:27

Suze: 30 days from now,

00:33:29

Suze: you

00:33:30

Suze: have 100 shares that you bought a long time ago when the stock was way up. Now the stock is down. Right? So you want to get into it at this low price right now because you think it might go up from here. All right.

00:33:45

Suze: But you want to take advantage of all the money that you lost in the stock over the past few years that you've owned it. So you buy the new one today, right? You buy that exact same stock today. You wait 30 days, and then you sell the one that you had a loss in.

00:34:06

Suze: Do you get to take that loss off your taxes?

00:34:10

KT: Yeah, I think you do because it's so I bought that other one a long time ago.

00:34:16

Suze: So it's been

00:34:16

KT: more than 30 days I've held the first round let's say, right.

00:34:21

Suze: Final answer? Alright. How would all of you answer that question?

00:34:27

Suze: Here's how Suze Orman would answer that question. And this is KT signal whether she is right or wrong. (WRONG ANSWER NOISE)

00:34:37

KT: Wait, so the one that I had first for like, let's say I had it six months?

00:34:42

Suze: You could have had it 10 years. You cannot buy a stock, the same stock, 30 days before or 30 days after you have

00:34:53

Suze: sold the stock that you're going to take a loss on your taxes. The same stock. Alright.

00:34:59

KT: The secret ingredient here is the same stock.

00:35:03

Suze: The same stock. All right, KT next part of the question.

00:35:07

KT: Right.

00:35:08

Suze: Which is,

00:35:10

Suze: even if it was traded in your IRA,

00:35:13

Suze: yeah, remember that. So if they did the trade in their IRA, they bought 100 shares of Meta in their IRA,

00:35:24

Suze: 30 days later they sell Meta and take a loss on it outside of their IRA. Can they do that?

00:35:31

Suze: That's

00:35:32

Suze: what I talked about earlier with that earlier question.

00:35:36

KT: No.

00:35:36

Suze: Right, no way. No way. Now here's the last thing. I own Meta.

00:35:45

Suze: And I want to sell it for a loss. Can you buy meta in your IRA, or in your name

00:35:57

Suze: within 30 days before or 30 days after, and I still get to take the loss on my taxes?

00:36:05

KT: I don't think so. I don't think you can do something like that.

00:36:09

Suze: Yeah. Ding ding ding ding dign. So everybody.

00:36:12

KT: Sounds like it was too sneaky.

00:36:14

Suze: So please

00:36:15

KT: Was it?

00:36:16

Suze: It was too sneaky. Don't don't do it. Don't play with the IRS.

00:36:22

Suze: And don't think that you're going to come out

00:36:25

Suze: way that you're going to be able to take a loss on a stock while you still really own that stock or you just purchased it.

00:36:34

KT: And you shouldn't try to outsmart the IRS.

00:36:38

Suze: Now if you owned 1000 shares of it and you wanted to sell like 100 shares or whatever, you wanted to sell half of it. No problem with that. Even though you still own it, but you can't buy it

00:36:52

Suze: for 30 days before or 30 days after. Got that, everybody? If you're taking that stock as a loss, all right. And you can't do it in a Roth IRA or an IRA and offset it, and you can't have your spouse do it. All right, KT now, what are you gonna do?

00:37:12

KT: Go fishing.

00:37:13

Suze: You're going fishing again?

00:37:16

Suze: You are really?

00:37:17

KT: Yeah.

00:37:18

Suze: Oh

00:37:18

Suze: my God.

00:37:19

KT: I may catch some yellow...

00:37:20

Suze: Ask me what I'm doing, KT.

00:37:22

KT: Sending my podcast in.

00:37:24

Suze: Besides that.

00:37:25

KT: What are you doing?

00:37:27

Suze: I'm interviewing with Forbes.

00:37:29

KT: Oh, she's got lots of interviews lined up.

00:37:32

Suze: What is this? KT gets to go fishing every day, and Suze's working.

00:37:38

KT: But it's also we're trying to build up

00:37:41

KT: a nice little supply of fish for the family who will be arriving very soon.

00:37:46

KT: Yeah, they're all coming for Thanksgiving. And they love eating

00:37:51

KT: fresh fish,

00:37:53

Suze: and wahoo in particular. KT's brother, John could eat a whole wahoo in one day. I've never seen anything like it. Okay, everybody. So there you go, and

00:38:06

Suze: until Saturday night with Suze School, make sure that you understand there's really only one thing that we want for you and your money, and that is what KT?

00:38:16

KT: To be safe, strong and secure.

00:38:19

Suze: Now you stay safe, everyone. Bye, bye.

00:38:22

KT: Bye everyone.


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Suze Orman Blog and Podcast Episodes

Suze's Financial Strength Test

Answer Yes or No to the follow statements.

I pay all my credit card bills in full each month.

I have an eight-month emergency savings fund separate from my checking or other bank accounts.

The car I am driving was paid for with cash, or a loan that was no more than three years, and I sure didn’t lease!

I am contributing at least 10% of my gross salary to a retirement plan at work, or I am saving at least that much in an IRA and/or regular taxable account.

I have a long-term asset allocation plan for my retirement investments, and once a year I check to see if I need to do any rebalancing to stay on target with my allocation goals.

I have term life insurance to provide protection to those who are dependent on my income.

I have a will, a trust, an advance directive (living will), and have appointed someone to be my health care proxy.

I have checked all the beneficiaries of every investment account and insurance policy within the past year.

So how did you do?

If you answered yes to every item, congratulations. If you are working on improving on a few items, I say congratulations as well.

As long as you are comitted to truly creating financial security, I applaud you. If that means you are paying down your credit card balances, or are building up your emergency fun with automated payments, that’s more than fine. You are on your way!

But if you found yourself saying No to any of those questions, and you’re not working on moving to Yes, then I want you to stand in your truth. No matter how good you feel, you have some work to do before you can honestly know what you are on solid financial ground.

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